Fitch Affirms W.R. Berkley's Ratings; Outlook Stable

Business Wire, Feb 13, 2008

NEW YORK -- Fitch Ratings today affirmed all ratings for W.R. Berkley Corporation (Berkley) and related property/casualty (P&C) operating subsidiaries. These ratings include 'A-' Issuer Default Ratings (IDRs) for Berkley, as well the senior debt, subordinated debt, and Insurer Financial Strength (IFS) ratings listed below. The Rating Outlook is Stable.

Fitch's ratings for Berkley consider the company's strong niche market positions in several lines, minimal exposure to catastrophe losses, good long-term financial results and a strong underwriting culture.

Key expectations that support Berkley's current ratings include: 1) that Berkley's underwriting and profitability performance will remain strong relative to peers through 2008, although combined ratios are likely to trend higher, 2) that Berkley's loss reserves are adequate and that any near-term adverse loss reserve development should be modest, 3) that Berkley's equity-credit adjusted financial leverage, which was roughly 25% as of Sept. 30, 2007 will not exceed 30% in the near term, and 4) that capital at the operating subsidiary level will remain near current levels, as measured by Fitch's new economic capital model, Prism, and traditional statutory Risk Based Capital (RBC) ratios. Based on year-end 2006 Prism results, Berkley's aggregated capital position exceeds Fitch's standards for an 'A ' level of confidence and is therefore adequate for the rating category.

These strengths are partially offset by Berkley's somewhat more volatile performance over the longer term and the inherent uncertainty surrounding the company's loss reserve levels due to its focus on long tailed lines, for which ultimate liabilities are difficult to estimate.

The following ratings are affirmed with a Stable Outlook:

W.R. Berkley Corporation

--Issuer Default Rating at 'A-';

--$200 million 5.6% senior debt at 'BBB ';

--$89 million 9.875% senior debt at'BBB ';

--$150 million 5.125% senior debt due 2010 at'BBB ';

--$200 million 5.875% senior debt due 2013 at 'BBB ';

--$150 million 6.15% senior debt due 2019 at 'BBB ';

--$76 million 8.7% senior debt due 2022 at 'BBB ';

--$250 million 6.25% senior debt due 2037 at 'BBB '.

W.R. Berkley Capital Trust II

--Trust preferred securities at 'BBB'

Berkley Insurance Company

--Insurer financial strength 'A'.

Berkley Regional Insurance Company

--Insurer financial strength 'A '.

Admiral Insurance Company

--Insurer financial strength 'A '.

Carolina Casualty Insurance Co

--Insurer financial strength 'A '.

Nautilus Insurance Company

--Insurer financial strength 'A '.

Acadia Insurance Company

--Insurer financial strength 'A '.

Firemens Ins Co of Washington DC

--Insurer financial strength 'A '.

Berkley Regional Specialty Insurance Co.

--Insurer financial strength 'A '.

Continental Western Insurance Co.

--Insurer financial strength 'A '.

Tri State Insurance Co of Minnesota

--Insurer financial strength 'A '.

Union Insurance Company

--Insurer financial strength 'A '.

Union Standard Insurance Co

--Insurer financial strength 'A '.

Union Standard Lloyds

--Insurer financial strength 'A '.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site. The ratings above have been initiated by Fitch as a service to investors. The issuer did not participate in the rating process other than through the medium of its public disclosure.